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Trouble in open access paradise?
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[quote user="cogload"] <P>FM </P> <P>It was known in the 1993 Railways Act as the Peterborough Process. It was axed. The idea was that bidders would bid for slots every 8 weeks and the highest bidder would win. </P> <P>The reason why it was axed was because:</P> <P>a) The process would destroy the timetable, reduce the premia payable by the franchisee/ increase the subsidy payable to the franchisee; knacker the concept of interoperable ticketing; push freight further to the margins on the timetable than it already would be (monopoly track supplier + competitive OA freight operators = smaller bids for paths = pushed out of the way by richer passenger operators); be inefficient in terms of capital employed and in terms of demand management (sch 8 and 4 performance) etc etc etc.....</P> <P>You just seem to fail to understand that freight would have no chance of even getting on the bid scale unless it was for freight only lines/ secondary mains. They would be pushed out by the passenger operators every time. You don't understand that freight (which are OA operators and NOT franchisees) and OA passenger run because they only pay MARGINAL COSTS toward the infrastructure owner - there is a hidden subsidy whcih is basically paid by the Franchised operators as a quid pro quo for dominating the timetable; and you also singularly fail to understand that if the freight operators bid on the basis of full slots and paying full cost basis there would be very very few freight operators left in the UK. And Europe. Why? Because it is cheaper by truck thats why. </P> <P> I work in the Railway Industry within the UK and am in the process of a degree covering this subject. Blow off about OA operators in the states if you want, that is your country. Do NOT lecture me over why OA access is so superior to vertically integrated systems in the UK. - Especailly when we have had one sep infrastructure owner go bankrupt; a massive cost explosion from the bad old days of British Rail (an increase of subvention from roughly £1bn to 4.5bn per year) and the OA freight operators struggle to return barely 10% GROSS. [/quote]</P> <P>There, was that so hard? Now I'll tell you where you're wrong.</P> <P>I notice you make no mention of relative freight rates. You seem to infer that trucking is less costly than using rail to move bulk commodities. With petrol prices that hover around $6 US equivalent, British truckers are paying twice the cost of fuel as US truckers. Meanwhile, much of the British railway network is electrified, so there is another advantage of British rail over US rail networks. What you seem to be missing is that there is a greater cost margin to move a container by truck in Britian than to do the same by truck in the US compared to the respective rail offerings. Those greater differentials represent a larger piece of the pie for revenue sharing with rail service providers than we have in the US. Yet, intermodal is continuing to grow on US railroads, so somehow, in spite of the relative cost disadvantages US railroads have vs over the road truckers, they're still getting the natural shift from road to rail, because the trucking companies will make more money if the ship their trailers and containers by rail than by over the road. The US railroads are getting a share of that savings, and everyone wins.</P> <P>Yet, your country is so saturated with passenger trains that there is no room for freight, even with the higher profit potential? Then it all gets back to the choices I layed out for the Europeans - either go back to nationalization and mostly passenger trains, or stick to your guns and force passengers and freight to pay fully allocated costs of providing rail services under privatization with intramodal competition - at full allocation passenger numbers will drop as they shift to road in reaction to fare increases, while freight will have enough margin left over to stick with rails. It is natural economic law - freight moves better in bulk, passengers move better with individualized choices. But because of your addiction to subsidy and overt control over the citizenry, you seem to have it backwards, with freight moving by road at a larger percentage while passengers move by rail in larger percentages.</P> <P>Now, for some real irony in you POV - if you opt for privatized integrated railways, you will be in a worse fix than you are now. Because without intramodal competition to keep things honest, the naturalized monopolies inherent in integration will disregard the lesser revenue providers in favor of the most optimized revenue producers - and them ain't passengers. Freight has the value-added component, people do not. Commerce has a better tax return base than people's incomes. Without that value-added component, it is impossible for a private railroad to make any money without a subsequent subsidy. So in effect, you're minimizing the aspects that have greater tax revenue potential in favor of the aspects with the more, shall we say, "reluctant" tax revenue potential. We're slowly learning that in the States, and it has an analogous meaning for your situation. If the tax base you use to subsidize the rail service providers is related to user fees, then you're not maximizing that potential if you give preference to passengers over rail. If on the other hand it is from more general tax collections, then the misoptimization has less impact. But you'd still be subsidizing private monopolies (who will still charge higher fares than the nationalized integrated railroad of yore) to keep that passenger preference, and your roads will still be clogged with freight that should be on rails by all normal economic measurements.</P> <P>How does that make you feel? Not too optimistic now, are we?</P> <P>Back to the Peterborough process. You seem to be of the mindset that slot bidding negates scheduling, and running a scheduled railroad is paramount for a passenger dominated system. I agree that keeping to a tight schedule is key for running passenger operations. So why not let out the slots via the schedule? It shouldn't be that hard, since it is easier for freight to conform to scheduling than it is for passengers to conform to on-call departure/arrivals. Do your passenger trains even approach max train length in conformity to the track layout? Probably not, most passenger trains don't even come close to maxing out length. So why not bid out the always available slot <EM>behind</EM> each passenger train and run it as an extra, if not a de facto mixed with the passenger train? You'd be suprised what freight forwarders will conform to to get the goods from Point A to Point B in the most reliable manner and the least amount of cost. All it takes is coordination adjacent to the passenger station at the freight's destination. And freight doesn't have to be boxcars and tanker cars, it can be exclusively trailers and containers. I know, I know, clearances on most lines are not fit for double stacks, let alone TOFC, but those are minor inconvienences. Single stack is still more efficient than one container per lorrie, and lorrie's can still ride low in well type cars, enough so to make clearances.</P> <P>The point is, there are ways of fitting in the logical opportunities to move freight via intramodal competition, without throwing the baby out with the bathwater.</P> <P>I am glad to hear you are delving into academia. You will learn something at University that you seem to lack on this forum - if you cannot take constructive critisism, you will fail in the academic world. Academia's lifeblood is dependent on the synthesis of ideas, not the repression of such.</P>
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